As two New Mexico regulatory agencies craft separate, but related, sets of new regulations to control emissions from oil and gas operations, environmentalists are concerned that one set of rules as currently written would exempt the vast majority of oil and gas operators in the state from oversight.
The two sets of rules, one — a gas-capture regulation being put forward by the New Mexico Oil Conservation Division (OCD) — and the other — a regulation to limit emissions of the gaseous precursors to ozone, being crafted by the state’s Environmental Department (NMED) — both have their origins in the ambitious Climate Strategy document that Governor Michelle Lujan Grisham introduced last year.
Earlier in October, the Energy, Minerals and Natural Resources Department, the parent agency of OCD, released the final version of its proposed gas waste-reduction rule, which would require oil and gas operators to capture 98% of the natural gas produced by 2026. The state Environmental Department is expected to release its proposed final regulation sometime later this year.
Regulators from both agencies stress that the two sets of rules are being crafted to work in harmony with each other. However, while environmental groups generally have given high marks to the proposed OCD rule, they pan the NMED draft proposal as riddled with loopholes that will allow most oil and gas operators in the state to continue to pollute.
Camilla Feibelman, the director of the Sierra Club Rio Grande Chapter, said that while the chapter is still analyzing the OCD methane rule, the successful implementation of that rule ultimately will hinge on the strength of the final Environment Department’ regulation. “The OCD rules only address venting and flaring, leaving management of leaks to the Environment Department,” Feibelman said in an email statement.
Meanwhile, Feibelman said that under the draft version of the NMED rules, the vast majority of the wells in the state would be exempt from leak detection and repair requirements. “Until we know whether this loophole has been closed, we can’t clearly evaluate the impact of the OCD rule,” she said.
The NMED draft emission rule , which focused on a handful of oil- and gas producing counties in the northwest and southeast corners of the state where ozone concentrations exceed 95% of the national ambient air quality standard, establishes emissions standards for volatile organic compounds (VOC) and nitrogen oxides (NOx) from oil and gas production and processing sources. The rule covers emissions from equipment used in the extraction, collection, storage and transport of oil, gas, hydrocarbon liquids and water produced in association with hydrocarbon production.
But there are certain exceptions, which include, facilities with “a site-wide total annual potential to emit less than 15 tons per year (tpy) of volatile organic compounds (VOC)” as well as low-producing “stripper” wells. A stripper well is defined as an oil well with a maximum daily average oil production of less than 10 barrels of oil per day, or a natural gas well with a maximum daily average production of 60,000 cubic feet per day.
Environmentalists argue that if these exemptions are allowed to remain in the final version of the rules, they would gut the impact of the regulation.
“Those rules, when they were initially released back in July, had some very large loopholes that were included and we continue to be very focused on getting those exemptions closed,” said Jon Goldstein, director of regulatory and legislative affairs for the Environmental Defense Fund.
“Those are the exemptions that our analyst finds would leave the vast majority of wells in New Mexico unchecked,” Goldstein said in an interview. He argued that 95% of the wells in the state would qualify for either the stripper well or the 15 tons-per-year exemption. “That would leave far too many parts of the state without the benefit of pollution reductions from these rules.”
While the OCD’s proposed gas capture rule is viewed as one of the most robust in the nation, because it’s designed to work in concert with the NMED rule, the resulting suite of regulations would actually be weaker than those in other producing states, Goldstein said.
“Texas has a leak-detection repair threshold of 10 tons per year,” he said. “That means the New Mexico rules would be 50% weaker than even what is required in Texas. That is not meeting the governor’s goal of establishing nation-leading rules in New Mexico.”
Rule will be ‘strongest possible’: Secretary Kenney
Environment Department Secretary James Kenney defended the need for the exemptions, saying the focus of the proposed draft rule should on the reduction of levels of VOC and NOx emissions rather than on the number of wells it would impact.
“We certainly do want to present the strongest rule possible,” Kenney said in an interview. He added that the department was constrained under the state’s Air Quality Control Act, to promulgate rules under strict scientific, environmental and economic guidelines that limit the reach of its authority.
Environment Department data estimates that the draft rule as proposed would result in annual emissions reduction of 150,000 to 160,000 tons of VOC, and 60,000 to 80,000 tons of NOx reduction. The department notes that NOx emission limits will be removed from the rule if modeling shows that NOx does not influence ozone.
Kenney said the department expects to revise the proposed draft rule, based on public comments received and present the final draft rule to the state Environmental Improvement Board sometime in late November or early December. The EIB would then begin its process to adopt the final rule, which will likely take place after the close of the state legislative session, likely next April.
A spokesman for New Mexico Oil & Gas Association said he hopes that NMED will take into account the needs of the oil and gas industry in crafting the final version of the emissions rule. NMOGA has submitted more than 200 pages of comments on the proposed Environment Department rule as well as the OCD rule, Robert McEntyre said in an interview.
“We’ve demonstrated a commitment to collaborating with both agencies to bring in our expertise to the table to ensure that the agencies are hearing from the engineers, the geologists and the technical experts who will ultimately be responsible for implementing these rules at the field level.”
